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Solicitor's Accounts > 3. Common Accounting Entries > Flashcards

3. Common Accounting Entries Flashcards

1
Q

Entry: Receiving Mortgage Funds from the lender

A

CR: Client Ledger Account
DR: Cash Sheet Client Account

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2
Q

Entry: Sending mortgage funds to the seller

A

DR: Client ledger account
CR: Cash sheet client account

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3
Q

Entry: Receipt of deposit by seller’s solicitor (agent)

A

CR: Client ledger account for that seller
DR: Cash sheet client account

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4
Q

Receipt of deposit by the seller’s solicitor when holding the deposit as stakeholder

A

At exchange:

CR Client ledger stakeholder (stakeholder ledger)
DR Cash Sheet client Account

On Completion

DR Stakeholder Ledger
Credit Client ledger account for that seller (client)

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5
Q

Money received from client to reimburse firm for a paid disbursement

A

CR: Client ledger business account for that client
DR: Cash sheet business account

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6
Q

Non-client money paid out

A

DR: Client ledger business account
CR: Cash sheet business account

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7
Q

Non-client Money paid out from petty cash

A

DR: Client ledger business account for that client
CR: Cash sheet petty cash account

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8
Q

Client money received and paid into separate designated client account:

A

CR: Client ledger SD client account for that client
DR: Cash sheet separate designated client account for that client

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9
Q

Client money paid out from a separate designated client account

A

Debit Client ledger separate designated client account for that client

CR: cash sheet separate designated client account for that client

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10
Q

Transfer from client account to business Account - two entries

A

DR: Client ledger client account for that client
CR: Cash sheet client account

AND

CR: Client ledger business account for that client
DR: Cash sheet business account

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11
Q

Transfer from business account to client Account - two entries

A

DR: Client ledger business account for that client
CR: Cash sheet business account

AND

CR: Client ledger account for that client
DR: Cash sheet client account

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12
Q

Transfer of client money from the client account to separate designated client account

A

DR: Client ledger account for that client
CR: Cash sheet client account

AND

CR: Client ledger separate designated client account for that client
DR: Cash sheet separate designated client account for that client

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13
Q

Transfer between two clients when the money is remaining in the client account

A

DR: Client ledger client account for client transferring

CR: Client ledger client account for client who is receiving

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14
Q

Payment of mortgage monies from the lender to the borrower when the solicitor does NOT have a separate client ledger for the buyer’s lender:

A

CR: Client ledger client account for that client
DR: Cash sheet client account

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15
Q

Payment of mortgage monies from the lender to the borrower when the solicitor DOES have a separate client ledger for the buyer’s lender:

A
  1. Money is received from lender

CR: Client ledger account for the lender
DR: Cash sheet client account

  1. Mortgage money transferred to buyer from the lender

DR: Client ledger account for lender
CR: Client ledger account for borrower / buyer

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16
Q

Payment of mortgage redemption monies to the lender from the borrower (Seller): when the solicitor does NOT have a separate client ledger for the seller’s lender

A

DR: Client ledger client account for the seller
CR: Cash sheet client account

17
Q

Payment of mortgage redemption monies to the lender from the borrower (Seller): when the solicitor DOES have a separate client ledger for the seller’s lender

A
  1. transfer redemption money from seller to lender

DR: Client ledger client account for seller
CR: Client ledger client account for lender

  1. Pay out the redemption money to the lender

DR: Client ledger client account for the lender
CR: Cash sheet client account

18
Q

Payment of interest earnt by a separate designated client account

A

CR: Client ledger separate designated client account for that client
DR: Cash sheet separate designated deposit client account for the client

19
Q

PAYMENT, OF A FAIR SUM OF INTEREST ON CLIENT MONEY, TO AN INDIVIDUAL CLIENT FROM INTEREST EARNT BY THE CLIENT ACCOUNT

A
  1. First record the receipt of the interest earnt by the client account into the firm’s business account:

CR: Interest receivable ledger
DR: Cash sheet business account

  1. Then transfer the amount which is a fair sum of interest to the client

DR: Interest payable ledger
CR: Cash sheet business account

AND

CR: Client ledger client account
DR: Cash sheet client account

20
Q

Issuing a bill + VAT

A

DR: Client ledger business account for amount of bill of costs less VAT
CR: Profit costs with amount of bill of costs less VAT

AND

DR: Client ledger business account for VAT on bill
CR: VAT Account with amount of VAT on the bill of costs

21
Q

Client paying a bill issued to them: Via Cheque

A

CR: Client ledger business account for that client
DR: Cash sheet business account

22
Q

Client paying a bill issued to them - instructed to transfer money from client account to business account

A

(Total amount transferred will be bill + VAT)

  1. Withdraw money from client account

DR: Client ledger client account for that client
CR: Cash sheet client account

  1. pay money into business account

CR: Client ledger business account for that client
DR: Cash sheet business account

23
Q

Issuing a bill + VAT to a lender who does not have a separate client ledger

A

DR: Client ledger business account for the borrower with the amount of the bill (less VAT)
CR: Profit costs

AND

DR: Client ledger business account for borrower with the amount of the VAT on the bill
CR: VAT Account

24
Q

Issuing a bill plus VAT to a lender who has a separate client ledger

A

DR: Client ledger business account for the lender with the amount of the bill of costs (Less VAT)
CR: Profit Costs

AND

DR: Client ledger business account for lender with amount of VAT on the bill of costs
CR: VAT Account

THEN borrower usually pays lender’s bill - costs need to be transferred from the lender to the borrower

DR: Client ledger business account for the borrower with the total amount of the bill of costs PLUS VAT
CR: Client lender business account for the lender with the total amount of the bill of costs PLUS VAT

25
Q

Reducing a bill (+VAT)

A

Credit client ledger business account for that client with the amount the bill
of costs (less VAT) is being reduced by

Debit profit costs with the amount the bill of costs (less VAT) is being reduced by

AND
Credit client ledger business account for that client with the reduction in VAT on the bill of costs

Debit VAT account with the reduction in VAT on the bill of costs

26
Q

Writing off a Bad Debt and its VAT

A

Credit client ledger business account for that client with the amount of the debt being written off (excluding VAT)

Debit bad and doubtful debts with the amount of the debt being written off
(excluding VAT)

AND

Credit client ledger business account for that client with the amount of VAT in respect of the unpaid debt

Debit VAT account with the amount of VAT in respect of the unpaid debt

27
Q

Paying a disbursement plus VAT as an AGENT

A
  1. If there is sufficient client money, use this

Debit client ledger client account for that client for the cost plus VAT (as one
figure)
Credit cash sheet client account for the cost plus VAT (as one figure)

  1. Or if there is insufficient client money held for client - use business account

DR: Client ledger business account for that client for costs plus VAT (one figure)
CR: Cash sheet business account for cost plus VAT as one figure

28
Q

Paying a disbursement plus VAT as principal

A

When the authorised body pays the cost plus VAT:

Debit client ledger business account for that client with the amount of the
cost (excluding VAT)

Credit cash sheet business account with the amount of the cost (excluding
VAT)

AND

Debit VAT account with the amount of VAT in respect of the cost

Credit cash sheet business account with the amount of VAT in respect of the
cost

When authorised body issues a bill to the client

Debit client ledger business account for that client with the amount of VAT
in respect of the cost

Credit VAT account with the amount of VAT in respect of the cost

Solicitor's Accounts (6 decks)

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